News Releases

Sierra Pacific Resources Agrees to Sell Interest In Valmy Power Station to NRG Energy

RENO, Nev.
Oct 19, 2000

Sierra Pacific Resources (NYSE: SRP), parent company of Sierra Pacific Power Company and Nevada Power Company, announced today that it has agreed to sell its 50 percent interest in the Valmy Power Station to NRG Energy of Minneapolis, Minnesota. Under the agreement, Sierra Pacific will have the right to buy energy and ancillary services from the Valmy Power Station for agreed upon prices subject to a collar, through early 2003. The sale price of the asset bundle, which includes other smaller generation facilities, was $273.3 million, net of a payment from Sierra Pacific to NRG for the power purchase agreement, subject to taxes and other adjustments. The Valmy Power Station, which is primarily coal-fired, sells electricity in the northern Nevada and surrounding markets. Sierra Pacific's net capacity interest in the Valmy Power Station totals 286 MW.

The sale of the generation assets is a regulatory condition of Sierra Pacific Resources merger with Nevada Power, which was completed in July 1999. In May the company agreed to sell its 14 percent interest in the Mohave Generating Station in Laughlin, Nevada, to the AES Corporation. Sierra Pacific Resources intends to complete the sale and transfer of its remaining gas, oil and coal-fired Nevada generation assets in 2001.

"We are progressing as planned with the sale of our generation assets in Nevada," said Walter Higgins, chairman, president and chief executive officer of Sierra Pacific Resources. "In addition to jump starting competition in the state by allowing energy production and sales by new alternative providers, completing divestiture will further our goal of becoming a premier transmission and distribution company in the West."

The sale of the Valmy Power Station bundle, which is subject to approval and review by various regulatory agencies, is expected to close in mid-2001.

Located forty miles from Winnemucca, Nevada, the Valmy Power Station consists of two similar coal-fired units and is owned jointly by Sierra Pacific Power Co. and Idaho Power Co. Sierra Pacific owns 50% of the station and operates the plant. Also included in the sale to NRG Energy are the Battle Mountain Diesel Plant and the Winnemucca Gas Plant.

Credit Suisse First Boston acted as financial advisor to Sierra Pacific Resources on the sale. Headquartered in Reno, Nevada, Resources is a holding company whose principal subsidiaries are Nevada Power, the electric utility for southern Nevada, and Sierra Pacific Power Company, the electric utility for most of northern Nevada and the Lake Tahoe area of California, and a natural gas and water distributor in the Reno-Sparks area. Other subsidiaries include the Tuscarora Gas Pipeline Company, which owns 50 percent interest in an interstate natural gas transmission partnership, and Sierra Pacific Communications, a telecommunications company.

NRG Energy is a leading global energy company primarily engaged in the acquisition, development, construction, ownership and operation of power generation facilities. NRG owns all or a portion of 63 power generation projects and its net ownership interest in these projects exceeds 14,000 MW. NRG Energy's operations utilize such diverse fuel sources as natural gas, oil, coal and coal seam methane, biomass, landfill gas, and hydro, as well as refuse-derived fuel.

SOURCE: Sierra Pacific Resources

Contact: Media, Charlie Fletcher, 775-834-3959, or Investors, Jim
McMorran, 775-834-4640, both of Sierra Pacific Resources